Green Groups Slam New York's Softening RGGI Stance

Green Groups Slam New York's Softening RGGI Stance

Environmental groups are assaulting New York Gov. David Paterson for his decision to reconsider whether the state should increase the amount of free greenhouse gas permits it doles out to power producers participating in the Regional Greenhouse Gas Initiative (RGGI).

RGGI, the country's first greenhouse gas cap-and-trade program, originally planned to auction off nearly all allowances, rather than giving them away for free as was done in the European Union's Emissions Trading Scheme (EU ETS). The free allowances in the EU led to accusations of windfall profits for power companies, who raised prices on electricity even though they received the allowances at no charge.

"Numerous scientific studies completed too late to be included in last year's Fourth Assessment of the Intergovernmental Panel on Climate Change reveal that many effects of global warming are occurring more quickly and with potentially more serious consequences than previously predicted," Lance Pierce, director of the climate program at the Union of Concerned Scientists, said in a statement. "Now is a time for leadership on policies that will reduce emissions, not backsliding."

Luis Martinez, an energy attorney at the Natural Resources Defense Council, called RGGI good for consumers, climate and the economy.

"The Northeast took a bold step forward for our clean energy future and the fight against global warming by signing on to RGGI -- and there is no reason for the governor to move New Yorkers backward," Martinez said.

But some utilities in the RGGI program are balking at paying for the permits, arguing the system unfairly penalizes those locked in long-term contracts because they can't recoup the added expense of the permits. They're pushing for the amount of free allowances to increase from 1.5 million tons of carbon dioxide equivalent to 6.5 million tons, which could save them nearly $17 million, according to the New York Times.

The Independent Power Producers of New York (IPPNY) insists it isn't trying to derail RGGI.

"I cannot speak to the governor's plans going forward, but, during our conversations on this matter, it was a refreshing change that he at least recognized that some aspects of the program are unfairly detrimental to businesses and consumers in New York State," Gavin Donohue, IPPNY president and CEO, said in a statement this week. "Such recognition is not an abandonment of the RGGI program but, instead, is a fundamental cornerstone of ensuring a successful program that can be implemented fairly."

New York State holds about a third of the allowances that will be traded through RGGI, but most agree New York's potential decision to give out more free permits won't have an impact on other nine states participating in the program, according to the Times. Such an event would also have no bearing on the amount of emissions under the cap.